4 Things to Do Before You Apply For a Travel Loan

People today place more value in acquiring experiences by travelling to various places than they did before. From domestic trips to long international vacations, the average Indian now travels two to five times a year. As Indians have increased their interest in leisure travel, financial institutions now offer travel loans at lucrative interest rates.  Travel loans are becoming a preferred option. They are easier to apply and have a faster disbursement turnaround time, with minimal documents involved. If you are planning to avail of a travel loan, here are four things to do. Read on.  

Make an Estimated Budget

When you plan your travel, you need to research your destination. Based on your research, you need to calculate the per day and the total cost of the trip. This will include your meals, accommodation, VISA fees, transportation, or any other expenses incurred during your trip. Making a budget for your trip will ensure that you only apply for the amount you need and don’t put an extra burden on your finances. You also have an option to approach a travel agent for a customized tour package. This will help you in estimating how much you need to borrow. 

Compare Secured and Unsecured Loans

To maintain a good credit score, you must take a good mix of secured and unsecured loans (loans without collateral). A high number of unsecured loans can harm your credit history. Suppose you already have multiple unsecured loans such as an education loan or have various credit cards. In that case, it is wise not to add to the burden with an unsecured travel loan. Additionally, secured loans are available at lower interest rates as compared to unsecured loans.

Choose Your Loan Tenure Carefully

Generally speaking, travel loans come with tenure ranging between 12 to 60 months. The interest rates for these tenures also vary. Although you may want to opt for a longer repayment tenure as it entails lower EMIs, you will end up paying more when compared to a shorter tenure with slightly higher EMIs. Also, you should check the lenders’ terms and conditions regarding the prepayment option for loan tenure. This way, you can pay more to reduce your loan tenure if you have some extra cash in hand.

Keep All Documents Ready

Although a travel loan requires minimal paperwork, you will need to submit some mandatory documentation while applying. This includes your address proof, proof of income, bank statements, and salary slips. For self-employed borrowers, the requirements may vary. Some lenders also may ask for other details such as your airfare, accommodation details, and travel itinerary. Check with your lender and keep all your documents ready for faster loan disbursement. 

Wrap Up

Travel plans may fill you with excitement but remember to keep enough money for your upcoming EMIs and ensure you do not miss a single payment. It can hamper your credit score and also lead to penalties. For faster processing, consider opting for online loan apps that offer lucrative interest rates for travel loans with minimum documentation and quick disbursal of funds.

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